SANTIAGO, Aug 10 Chile's newly merged regional
carrier LATAM Airlines said on Friday it posted
a profit of $49.725 million during the second quarter, boosted
by accounting effects of the tie up between Chile's LAN and
Brazil's TAM, as well as higher sales.
LAN Airlines completed a takeover of Brazilian rival TAM in
June, creating the world's second-largest airline by market
value in a deal that executives expect to yield up to $700
million in annual cost savings within four years.
LATAM compared its quarterly earnings to LAN's second
quarter results of last year, saying they had more than tripled.
However, removing the effect of the merger, including
exchange rate and fuel hedging gains, it said that LAN's profit
for the period fell 67.5 percent from a year earlier to $5.2
"The second quarter of 2012 presented a more challenging
scenario due to the fall in cargo demand and a depreciation of
local currencies, particularly the Brazilian real," LATAM said
in an earnings statement.
"However, passenger demand in practically all of Latin
America, remains strong."
LATAM said operating revenue totaled $1.548 billion during
the second quarter. Earnings per basic share totaled $0.14.
The June takeover came at a time of slowing economic growth
and demand for air travel in Brazil, Latin America's biggest
aviation market, and amid growing mergers and acquisitions
activity among airlines in Brazil as carriers struggle with high
labor costs, an unwieldy tax burden and overcrowded airports.
LATAM said on Thursday its July passenger traffic rose 7.9
percent compared with the same period last year.